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TMI Blog2024 (8) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... s peak. Due dates to deposit for these two months were 15.05.2020 and 15.06.2020 as per the relevant enactments. Assessee deposited the delayed amount in the month of June 2020 when there was relaxation in the lockdown and banking was permitted. There is no mischief on the part of the assessee in holding the employees contribution for long periods as contemplated in the memorandum explaining the provisions introduced in the Finance Bill, 1987 and CBDT circular (supra) and dealt in Checkmate Services [ 2022 (10) TMI 617 - SUPREME COURT] . In fact, assessee demonstrated its vigilance in depositing the impugned amounts at the first opportunity it got when the relaxation was given in the lockdown. Also, for all the subsequent months, the deposits have been on or before the prescribed due dates under the relevant enactments. Thus, in the present case under its peculiar set of facts, there cannot be any adverse effect on the assessee of not depositing the employees contribution of EPF and ESI within the meaning of section 36(1)(va) of the Act when the relevant enactment itself had given a waiver from levy of penal damages for the delay in deposit during the lockdown period . We delete th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted. The details of deposit of employees share of PF and ESI for the year under consideration and delay thereon is tabulated as under: 3.1. Assessee furnished copies of challans for the three delayed deposits which were made on 15.06.2020 and 16.06.2020, placed in the paper book and the same are extracted below: 4. Ld. CIT(A) by placing reliance on the decision of Hon ble Supreme Court in the case of Checkmate Services (P) Ltd. v. CIT [2022] 143 taxmann.com 178 (SC) did not allow the deduction and dismissed the appeal of the assessee. According to him, Hon ble Supreme Court had confirmed the stand of the Department that if the employees contribution towards EPF and ESI is not deposited within the due dates under the relevant Act as mandated by the explanation in Section 36(1)(va), the same will not be allowable as a deduction. Aggrieved, assessee is in appeal before the Tribunal. 5. Before us, ld. Counsel for the assessee reiterated the facts and referred to the documentary evidences placed on record as extracted above. She referred to circular issued by Employees Provident Fund Organisation dated 15.05.2020 vide circular No. C-I/Misc/2020- 21/Vol.I/1112. The circular is issued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, as per the lockdown phases implemented by the Government of India. Table below briefly lists the durations and restrictions imposed during each phase of the lockdown in India: S. No. Phase Name Dates Major restriction or relaxations 1. Phase 0 (Pre-lockdown) 1 24 March 2020 (24 days) No restriction; all activities in business-as- usual mode 2. Phase 1 25 March 14 April 2020 (21 days) All transport, industrial establishment, commercial and private establishments, and hospitality services closed 3. Phase 2 15 April 3 May 2020 (19 days) Restrictions similar to Phase 1 Allowed: Farming operation, some industries, movement of cargo 4. Phase 3 4 17 May 2020 (14 days) Cities classified into three zones (Red, Orange, and Green). Relaxation of rules in the Green and Orange zones. Allowed: Activities permitted during Phase 2 and construction activities and movement of vehicles for selected activities. Restrictions similar to Phase 1 applied in the Red zones 5. Phase 4 18 31 May 2020 (14 days) Allowed: Movement of vehicles without any special conditions along with the opening of the industry 7.2. We have perused the afore stated circular issued by EPF Organisation according to which delay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the provident fund or any fund set up under the provisions of the Employees State Insurance Act, 1948, or any other fund for welfare of employees. 8.1. Contention of the Revenue before the Hon ble Court was that when the assessee did not deposit the employees contribution in the PF account before the due date provided under the EPF/ESI Act, the assessee was disentitled to deduction under Section 36 in the relevant assessment order, though the assessee might have deposited the employees contribution on or before the due date of filing of the return under Section 139 of the IT Act. 8.2. Hon ble Court in para 35 and 52 took note of the memorandum explaining the provisions in the Finance Bill, 1987 through which section 2(24)(x), section 36(1)(va) and second proviso to section 43B were introduced. It was observed that these provisions were introduced to ensure timely payments were made by the employer to the concerned fund (EPF, ESI, etc.) and avoid the mischief of employers retaining amounts for long periods. 8.3. According to the Hon ble Court, the essential character of an employees contribution is that it is part of the employees income, held in trust by the employer and needs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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